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In June 2021, our bank successfully issued its inaugural Senior Preferred Green Bond for €1 billion. This was followed by the issuance of our first Retail Social Bond for €155 million in September 2021. Both issuances marked significant milestones in our sustainability journey, allowing the Bank to provide further support to renewable energy and green buildings in Italy while also advancing welfare and social support services in the country.
Both issuances took place under the Group’s Sustainability Bond Framework, based on the principles and guidelines of the 2021 version of the Green and Social Bond Principles and the Sustainability Bond Guidelines of the International Capital Market Association (ICMA), ensuring the transparent allocation and tracking of proceeds, the details of which were fully disclosed in our inaugural Sustainability Bond Allocation report published in July 2022.
Our Group remains committed not only to the green energy transition, but also to ensuring that this is a fair and just transition for all of society. Sustainability is central to how we do business: it underpins our corporate culture and ensures we are always acting in the best interests of all our stakeholders.
As detailed in the Sustainability Bond Allocation report, our full Green Bond proceeds have been dedicated to fund renewable energy, specifically photovoltaic (€408 million), wind (€293 million) and biomass (44 million) energy sources, as well as green buildings, including the Top 15% of Mortgages (rated for energy performance) across all regions (€228 million) and Real Estate (€27 million) in Italy.
Meanwhile our Social Bond proceeds have been allocated to finance projects with a positive social impact. So far, the focus has been on welfare and social support services (75.1% of allocations). Other projects supported include education and training, health and medical assistance and additional social services. The indirect impacts generated through the bond proceeds include a total of 1.52 million beneficiaries (149% of 2021 target); the delivery of 2.62 million training hours, 482 training courses, 193 professional internships, 108 social integration activities; and the provision of 1,322 beds in elderly homes, 1.21 million medical services and 555 social houses (mainly in social tourism).
We continue to build on the success of our inaugural Green and Social Bonds, working to create a more sustainable and equitable future for both businesses and individuals. For example, in 2022, we successfully issued Green Covered Bonds also in Germany (two for €500 million each), in Austria (one with a total volume of €500 million) and in Hungary (one for €60 million).
A conversation with...
Fiona Melrose, Head of Group Strategy and ESG
How do sustainability bonds contribute to our Bank’s overall strategy?
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Fiona Melrose
Head of Group Strategy and ESG
Our bank successfully issued its inaugural Senior Preferred Green Bond of €1 billion in June 2021, followed by the issuance of its first Retail Social Bond of €155 million in September 2021. In addition to UniCredit S.p.A., UniCredit Bank AG has also issued two Green Mortgage Covered Bonds worth €500 million each in September 2021 and September 2022. Furthermore, our bank in Hungary issued a Green Mortgage Covered Bond in October 2021 for €63.8 million and UniCredit Bank Austria successfully placed its first Green Covered Bond in May 2022 with a total volume of €500 million.
These issuances have all marked significant milestones in our sustainability journey, helping us to drive a just and fair transition, through continued support of the environment, including renewable energy and green buildings as well as of important social matters, such as welfare and social support services for the communities in our countries.
Details of how we’ve allocated the funds from the Group’s first ever own Green Bond and our first Retail Social Bond, in line with our ESG targets and commitments, were disclosed in our inaugural Sustainability Bond Allocation Report, published in July 2022.
How do sustainability bonds contribute to our Bank’s overall strategy?
Sustainability is central to our bank’s strategy and to how we do business, underpinning our corporate culture and commitment to always serve the best interests of all our stakeholders and communities. Our inaugural Sustainability Bond Allocation Report shows the significant positive social and environmental impact that’s been achieved through the asset allocation of the proceeds of our inaugural Green and Social Bonds in Italy.
The full Green Bond proceeds have been dedicated to fund renewable energy, specifically photovoltaic (€408 million), wind (€293 million) and biomass (€44 million) energy sources, as well as green buildings, including the Top 15% of mortgages (rated for energy performance) across all regions (€228 million) and real estate (€27 million) in Italy.
Meanwhile the Social Bond proceeds have been allocated to finance projects with a positive, tangible, and measurable social impact, focusing on welfare and social support services, such as social housing, care services for children and elderly people (75.1% of allocations). Other projects supported include education and training for vulnerable groups and the young, health and medical assistance and additional social services. The indirect impacts generated through the bond proceeds include a total of 1.52 million beneficiaries; the delivery of 2.62 million training hours, 482 training courses, 193 professional internships, 108 social integration initiatives; and the provision of 1,322 beds in elderly homes, 1.21 million medical services and 555 social houses.
How does their issuance enable us to deliver on our Purpose: Empowering communities to progress?
The issuance of these financial instruments provides our bank with a dedicated vehicle to finance not only a just and fair transition, but also social equity, fully in line with our purpose of empowering communities to progress and our commitment to support a more sustainable and equitable future for both businesses and individuals. We are proud of the concrete progress and impact already achieved through our bond issuance, once again proving the importance and efficacy of these instruments, which will continue to play a key role in how we drive the sustainable transition across our geographies.
Importantly, all UniCredit’s sustainable own bond issues take place under the Group’s Sustainability Bond Framework, based on the principles and guidelines of the 2021 version of the Green and Social Bond Principles and the Sustainability Bond Guidelines of the International Capital Market Association (ICMA), ensuring the transparent allocation and tracking of proceeds.
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The framework also allows all the Group’s main issuers (in particular, UniCredit S.p.A., UniCredit Bank AG and UniCredit Bank Austria) to issue green, social and sustainability bonds, as a recurring part of our bank’s funding activity.